Brits turn to the ‘Bank of Family and Friends' for financial help

In tough economic times people are turning to their loved ones for financial support, with more than half (57%) of UK adults saying that they often lend money to their friends and family, according to research from Gocompare.com.
 
In the survey more than a third (36%) said that they have lent money to pay off a friend's or family member's debts, and 1 in 4 (26%) have paid towards someone else's food, groceries or general living expenses.
 
But it's not all happy lending at the Bank of Family and Friends. A third (34%) of people said they had either fallen out with someone over money lent or knew somebody who had. This could explain why 60% of those surveyed said that they would be worried that lending money to their friends or relatives would damage their relationship with them.
 
Even though the majority of those surveyed would lend a financial hand, 1 in 4 (28%) admitted that they would think less of their friends if they asked them for money. From a borrower's perspective, 67% said they would be embarrassed to ask their friends for money, with 1 in 5 (18%) admitting that they would rather take out a payday loan than borrow from loved ones - despite some companies charging up to 5,853% APR.
 
Matt Sanders, banking expert at Gocompare.com, said: "It's interesting to see that despite challenging economic times, the majority of people are still happy to help their friends and family members out financially. Though, perhaps reasonably, some are still apprehensive when it comes to opening their wallets.
 
"When borrowing from or lending money to friends and family, it's important to consider the effect it might have on your relationship with the person. For instance, if you're considering borrowing money, it's important to be clear, honest and realistic about how you intend to pay the person back and a time frame in which you intend to do so."